SOUTHERN ARC PROVIDES UPDATE ON CANADA NICKEL
Vancouver, B.C.: Southern Arc Minerals Inc. ("Southern Arc” or the "Company”) (TSX Venture: SA) provides the following update regarding Canada Nickel Corp. ("Canada Nickel”), a private company of which Southern Arc owns 43.6% (15.3 million shares).
Settlement of Legal Action Against Diamondex
Canada Nickel has settled a legal action (as reported in the News Release dated December 19, 2008) against Diamondex Resources Ltd. ("Diamondex”) on the following terms:
The settlement of this matter enables Canada Nickel to pursue a new strategic direction while retaining the significant upside potential of the James Bay Lowlands project without any remaining funding obligations.
Oil and Gas Joint Venture
The Company is pleased to announce that Canada Nickel has entered into a joint venture agreement (the "Joint Venture”) with a Canadian intermediate oil and gas producer. The Joint Venture makes available to Canada Nickel a liquids rich gas prospect within established gas producing fairways in the Brewster Area of Alberta. Canada Nickel's Joint Venture partner reported total production of approximately 13,000 Barrels of Oil Equivalent per Day in Q3, 2009 and has a market capitalization of approximately $900 million.
The Brewster property is located in West Central Alberta. According to the Joint Venture agreement, Canada Nickel has the right to earn a 25% working interest in one section of land (640 acres) and in a well that was already drilled and cased in October 2008 by paying 100% of the completion costs. Subsequent to the completion operation, Canada Nickel will have the option to earn a 60% working interest in the second section by paying 100% of the drilling and completion costs. Drilling is currently underway and expected to be completed in December 2009. The Joint Venture Partner will operate the project.
The estimated cost of $1.6 million for the exploration program on Brewster property will be funded by Canada Nickel from existing working capital.
On behalf of the Board of
President and CEO
The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved of the contents of this press release. Neither the TSX Venture Exchange nor its Regulation Services Provider (as such term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.